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Tankers in Parallel

9/4/2008 12:00 AM

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—John A. Tirpak

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Sept. 4, 2008—As the KC-X tanker program goes into extended overtime, with both Boeing and Northrop Grumman backers in Congress threatening intervention, the notion of simply splitting the program between the two competitors is starting to look like one of the only logical ways to break the legal and political impasse in a timely fashion.

Gen. Art Lichte, head of Air Mobility Command, acknowledged that there is growing sentiment for a split decision, given the prospect of potentially years of litigation over who wins the $35 billion contract.

“If I get the money to do a split buy, I’ll gladly do that,” he told the Defense Writers Group Sept. 3 in Washington, D.C.

However, Lichte said the split buy is “troublesome,” because it would demand more than doubling the procurement account for tankers, now slated to receive around $4 billion a year.

He would be “very happy” to replace his all-but-grounded, Eisenhower-vintage KC-135Es at double the rate now planned, since that would reduce the risk of a fleet-wide grounding due to age issues and provide more capable aircraft to aircrews, sooner. But the peril would be that Congress mandates the buy without doubling the funding, forcing USAF to cut other, badly needed programs.

“Realistically, I’ve got to balance the budget … and that’s where I struggle and wring my hands about a split buy,” Lichte said.

Moreover, as Lichte observed, two airplanes mean twice the development cost, twice the logistics tail, and twice the training infrastructure—costs estimated at $2 billion to $4 billion up front and potentially as much in subsequent years.

Initially, the Air Force and DOD shied away from talk of a split buy, citing the higher costs. Now, that may change. Former Air Force Secretary Michael Wynne, in an extensive interview with the Daily Report shortly after leaving office earlier this year, said he believes that a split buy has benefits that now outweigh the drawbacks.

“I think a split buy right now is something we have to examine,” Wynne said in the July interview, and “the best way to do [it] is to take both contracts at face [value] right now and not halve the rate. I think you should double the rate.”

The Air Force has been planning to procure between 12 and 18 new tankers per year. So Wynne’s approach to double that rate would equate roughly to each contractor supplying 15 tankers per year, giving USAF around 30 new airframes each annum.

The benefits are many, Wynne said.

First, he noted, such a move would strengthen the aerospace industrial base, which is suffering from an ever-diminishing number of suppliers because of an ever-decreasing number of programs.

Second, it replaces the aging tanker fleet “at a faster rate, which I think is also mandatory,” said Wynne.

Third, he said, it maintains competition “well into the future,” providing potentially lower unit costs and adding procurement options down the road.

“Yes, it’s expensive,” he said, because doubling the buy would double the up-front cost. However, he believes giving the industrial base a shot in the arm is worth it. He said he thinks Congress “just woke up to 30 years of decay” in the industrial base, and “it’s like they’re in shock.”

So a split buy, as Wynne sees it, is "an opportunity to resolve a very tense political situation and still maintain competition." He added: "We’re only going to get to 360 [tankers]. We need 500. …You can kick this can down the road literally 15 years” before having to revisit the choice.

Wynne shrugged off the notion of excessive additional logistics costs. He noted that USAF already has three tankers in the inventory—KC-135Es, KC-135Rs, and KC-10s—and will soon add a fourth, the KC-X.

“Adding a fifth one, is that a big deal? No, … it just isn’t,” he said, considering that the KC-X tankers being offered are both going to have "phenomenally better reliability than either of the first three."

Some also argue that buying tankers in large lots with a competitive split buy would save money. Jacques Gansler, former Pentagon acquisition and technology chief, said as much in a study he did for Northrop Grumman in the run-up to the KC-X competition. Gansler posited a “great tanker war” akin to the “great engine war” of the 1980s and 1990s, which is generally regarded as having saved billions of dollars and increasing the quality of fighter engines made by Pratt & Whitney and General Electric.

Lichte agreed that either of the KC-X competitors will have a smaller logistics demand than the E and R model KC-135s. Commercial aircraft are designed to “get away from the gate” with many redundant systems to ensure on-time takeoffs, and both KC-X competitors derive from commercial airplanes, he noted.

If Congress approves buying 15 of each type per year that would more rapidly eliminate the problem the Air Force will face in 30 years when it is operating 80-year-old tankers.

“We need to get to a new tanker,” Lichte said flatly. “I am open to any suggestion as to how we get out of this. … If you were to tell me that [a split buy is] the only way we’re going to get out of this predicament, then sign me up.”